-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Dy4MT2G2nJftj8s4TGdOqwMHnpMDS5J4D4MofQsLiP+TJqvmL/W+EBQz77lcnrte r1LDZUEaDUGFl5TDh+g3Lw== 0000950152-02-004158.txt : 20020514 0000950152-02-004158.hdr.sgml : 20020514 ACCESSION NUMBER: 0000950152-02-004158 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020401 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020514 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST CITIZENS BANC CORP /OH CENTRAL INDEX KEY: 0000944745 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 341558688 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-25980 FILM NUMBER: 02645474 BUSINESS ADDRESS: STREET 1: 100 EAST WATER ST STREET 2: P O BOX 5016 CITY: SANDUSKY STATE: OH ZIP: 44870 BUSINESS PHONE: 4196254121 MAIL ADDRESS: STREET 1: 100 EAST WATER ST STREET 2: P O BOX 5016 CITY: SANDUSKY STATE: OH ZIP: 44870 8-K/A 1 l94509ae8-ka.txt FIRST CITIZENS BANC CORP 8-K/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 8-K/A CURRENT REPORT Pursuant to section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) April 1, 2002 FIRST CITIZENS BANC CORP ------------------------ (Exact name of Registrant as specified in its charter) OHIO 0-25980 34-1558688 ---- ------- ---------- (State or other jurisdiction of (Commission File Number) (IRS Employer incorporation or organization) Identification No.) 100 EAST WATER STREET, P.O. BOX 5016, SANDUSKY, OHIO 44870 ---------------------------------------------------------- (Address of principle executive offices) Registrant's telephone number, including area code: (419) 625-4121 N/A (Former name or former address, if changed since last report) Date of report: MAY 13, 2002 ------------ This Current Report on Form 8-K/A amends the previous Current Report of Form 8-K dated April 1, 2002 and filed April 4, 2002 to include the financial information and pro forma financial information pursuant to First Citizens Banc Corp's acquisition of Independent Community Banc Corp., which became effective April 1, 2002. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA INFORMATION (a) Financial Statements of Business Acquired: (1) Audited consolidated balance sheets of Independent Community Banc Corp. as of December 31, 2001 and 2000, and the related consolidated statements of income, changes in shareholders' equity and cash flows for the years then ended. (b) Pro Forma Information: (1) Unaudited pro forma condensed combined consolidated balance sheet of First Citizens Banc Corp as of December 31, 2001, assuming the merger was completed at that date, and the unaudited pro forma condensed combined consolidated statement of income for the year ended December 31, 2001, assuming the merger with Independent Community Banc Corp. was completed at the beginning of the year then ended. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. First Citizens Banc Corp /s/ James O. Miller May 13, 2002 - ------------------------------------ ------------------------------------- James O Miller Date Executive Vice President INDEPENDENT COMMUNITY BANC CORP. Norwalk, Ohio FINANCIAL STATEMENTS December 31, 2001 and 2000 CONTENTS REPORT OF INDEPENDENT AUDITORS......................................... 1 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS...................................... 2 CONSOLIDATED STATEMENTS OF INCOME................................ 3 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY........................................... 4 CONSOLIDATED STATEMENTS OF CASH FLOWS............................ 5 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS....................... 6 REPORT OF INDEPENDENT AUDITORS Board of Directors Independent Community Banc Corp. Norwalk, Ohio We have audited the accompanying consolidated balance sheets of Independent Community Banc Corp. as of December 31, 2001 and 2000, and the related consolidated statements of income, changes in shareholders' equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Independent Community Banc Corp. as of December 31, 2001 and 2000, and the results of its operations and its cash flows for the years then ended in conformity with accounting principals generally accepted in the United States of America. Crowe, Chizek and Company LLP Columbus, Ohio February 7, 2002 - -------------------------------------------------------------------------------- 1. INDEPENDENT COMMUNITY BANC CORP. CONSOLIDATED BALANCE SHEETS December 31, 2001 and 2000 - --------------------------------------------------------------------------------
2001 2000 ------------- ------------- ASSETS Cash and demand deposits with other financial institutions $ 4,980,986 $ 3,484,947 Federal funds sold 2,400,000 1,400,000 ------------- ------------- Total cash and cash equivalents 7,380,986 4,884,947 Time deposits with other financial institutions 990,000 -- Securities available for sale, at fair value 19,492,538 19,538,455 Other securities, at cost 736,200 700,300 Loans 101,714,036 105,528,839 Allowance for loan losses (1,390,833) (1,240,777) ------------- ------------- Loans, net 100,323,203 104,288,062 Premises and equipment, net 1,625,397 1,734,098 Intangibles, net 3,412,350 3,702,954 Accrued interest receivable and other assets 1,666,947 1,755,440 ------------- ------------- Total assets $ 135,627,621 $ 136,604,256 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Deposits Noninterest-bearing $ 15,807,245 $ 16,191,734 Interest-bearing 104,341,183 99,590,559 ------------- ------------- Total deposits 120,148,428 115,782,293 Securities sold under agreements to repurchase 312,693 300,871 Federal Home Loan Bank short-term advances -- 6,000,000 Other borrowings 2,235,000 2,635,000 Accrued interest payable and other liabilities 1,032,502 893,218 ------------- ------------- Total liabilities 123,728,623 125,611,382 Shareholders' equity Common stock: no par value, 1,400,000 shares authorized and 629,442 shares issued 1,870,042 1,870,042 Surplus 1,542,894 1,542,894 Retained earnings 8,698,622 8,061,481 Accumulated other comprehensive income (loss), net of tax 70,631 (167,777) Treasury stock, at cost: 15,256 shares in 2001 and 17,175 shares in 2000 (283,191) (313,766) ------------- ------------- Total shareholders' equity 11,898,998 10,992,874 ------------- ------------- Total liabilities and shareholders' equity $ 135,627,621 $ 136,604,256 ============= =============
- ------------------------------------------------------------------------------- See accompanying notes to consolidated financial statements. 2. INDEPENDENT COMMUNITY BANC CORP. CONSOLIDATED STATEMENTS OF INCOME Years ended December 31, 2001 and 2000 - -------------------------------------------------------------------------------
2001 2000 ----------- ----------- Interest income Loans, including fees $ 8,853,902 $ 8,595,983 Securities: Taxable 732,592 1,116,407 Nontaxable 160,350 191,663 Federal funds sold 174,584 19,531 ----------- ----------- 9,921,428 9,923,584 Interest expense Deposits 4,604,938 4,331,748 Other 298,860 611,604 ----------- ----------- 4,903,798 4,943,352 ----------- ----------- NET INTEREST INCOME 5,017,630 4,980,232 Provision for loan losses 431,500 373,000 ----------- ----------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 4,586,130 4,607,232 NONINTEREST INCOME Service charges on deposit accounts 474,647 482,664 Trust department income 310,539 350,000 Net securities gains (losses) 13,445 (23,036) Loan origination agent fee income 66,437 56,698 Other operating income 205,209 80,252 ----------- ----------- 1,070,277 946,578 NONINTEREST EXPENSE Salaries and employee benefits 1,761,020 1,814,830 Occupancy expense of premises 254,399 275,145 Furniture and equipment expense 305,450 298,864 Legal, professional and examination expense 276,813 271,545 Merger expenses 333,815 -- Other expenses 1,282,775 1,174,464 ----------- ----------- 4,214,272 3,834,848 ----------- ----------- INCOME BEFORE INCOME TAXES 1,442,135 1,718,962 Provision for income taxes 436,905 523,339 ----------- ----------- NET INCOME $ 1,005,230 $ 1,195,623 =========== =========== Earnings per common share: Basic and diluted $ 1.64 $ 1.97 =========== ===========
- ------------------------------------------------------------------------------- See accompanying notes to consolidated financial statements. 3. INDEPENDENT COMMUNITY BANC CORP. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY Years ended December 31, 2001 and 2000 - -------------------------------------------------------------------------------
Accumulated Other Common Retained Comprehensive Stock Surplus Earnings Income (Loss) ----- ------- -------- ------------- Balances at January 1, 2000 $ 1,870,042 $ 1,529,836 $ 7,231,001 $ (767,907) Comprehensive income: Net income 1,195,623 Other comprehensive income (loss): Net change in unrealized gain (loss) on securities available for sale, net of reclassification adjustments and tax effects 600,130 Total comprehensive income Dividends declared ($0.60 per share) (365,143) Purchase 2 treasury shares Issue 7,000 treasury shares for exercise of stock options 5,303 Sell 4,967 treasury shares to dividend reinvestment plan 7,755 ------------- ------------- ------------- ----------- Balances at December 31, 2000 1,870,042 1,542,894 8,061,481 (167,777) Comprehensive income: Net income 1,005,230 Other comprehensive income (loss): Net change in unrealized gain (loss) on securities available for sale, net of reclassification adjustments and tax effects 238,408 Total comprehensive income Dividends declared ($0.60 per share) (368,089) Purchase 101 treasury shares Sell 2,020 treasury shares to dividend reinvestment plan ------------- ------------- ------------- ----------- Balances at December 31, 2001 $ 1,870,042 $ 1,542,894 $ 8,698,622 $ 70,631 ============= ============= ============= =========== Treasury Total Stock, Shareholders' At Cost Equity ------- ------ Balances at January 1, 2000 $ (509,379) $ 9,353,593 Comprehensive income: Net income 1,195,623 Other comprehensive income (loss): Net change in unrealized gain (loss) on securities available for sale, net of reclassification adjustments and tax effects 600,130 -------------- Total comprehensive income 1,795,753 Dividends declared ($0.60 per share) (365,143) Purchase 2 treasury shares (37) (37) Issue 7,000 treasury shares for exercise of stock options 113,697 119,000 Sell 4,967 treasury shares to dividend reinvestment plan 81,953 89,708 ----------- -------------- Balances at December 31, 2000 (313,766) 10,992,874 Comprehensive income: Net income 1,005,230 Other comprehensive income (loss): Net change in unrealized gain (loss) on securities available for sale, net of reclassification adjustments and tax effects 238,408 -------------- Total comprehensive income 1,243,638 Dividends declared ($0.60 per share) (368,089) Purchase 101 treasury shares (2,762) (2,762) Sell 2,020 treasury shares to dividend reinvestment plan 33,337 33,337 ----------- -------------- Balances at December 31, 2001 $ (283,191) $ 11,898,998 =========== ==============
- -------------------------------------------------------------------------------- See accompanying notes to consolidated financial statements. 4. INDEPENDENT COMMUNITY BANC CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS Years ended December 31, 2001 and 2000 - ------------------------------------------------------------------------------
2001 2000 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 1,005,230 $ 1,195,623 Adjustments to reconcile net income to net cash from operating activities Depreciation 156,754 152,246 Provision for loan losses 431,500 373,000 Change in deferred tax asset 236 (2,314) Net (accretion) amortization on securities (94,855) 65,765 Amortization of intangibles 290,604 290,604 Loss (gain) on sales and calls of investments (13,445) 23,036 Federal Home Loan Bank stock dividends (35,900) (36,400) Changes in accrued interest, other assets and other liabilities 91,279 (457,328) ------------ ------------ Net cash from operating activities 1,831,403 1,604,232 ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES Net change in time deposits with other financial institutions (990,000) -- Securities available for sale Purchases (29,377,515) (981,170) Proceeds from maturities and paydowns 19,462,134 2,724,855 Proceeds from sales and calls 10,444,268 4,271,958 Purchases of loans (950,000) (3,319,128) Net change in loans 4,483,359 (6,364,798) Proceeds from sales of premises and equipment -- 1,000,000 Purchase of premises and equipment (48,053) (166,970) ------------ ------------ Net cash from investing activities 3,024,193 (2,835,253) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES Net change in deposits 4,366,135 (2,699,636) Net change in securities sold under agreement to repurchase 11,822 (3,880) Net change in FHLB short-term advances (6,000,000) 5,000,000 Proceeds from borrowings -- 2,735,000 Repayments of borrowings (400,000) (3,100,000) Cash dividends paid (368,089) (365,143) Proceeds from exercise of stock options -- 119,000 Proceeds from issuance of treasury stock 33,337 89,708 Acquisition of treasury stock (2,762) (37) ------------ ------------ Net cash from financing activities (2,359,557) 1,775,012 ------------ ------------ Net change in cash and cash equivalents 2,496,039 543,991 Cash and cash equivalents at beginning of year 4,884,947 4,340,956 ------------ ------------ CASH AND CASH EQUIVALENTS AT END OF YEAR $ 7,380,986 $ 4,884,947 ============ ============
- ------------------------------------------------------------------------------- See accompanying notes to consolidated financial statements. 5. INDEPENDENT COMMUNITY BANC CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2001 and 2000 - -------------------------------------------------------------------------------- NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION: The accompanying consolidated financial statements include the accounts of Independent Community Banc Corp. and its wholly-owned subsidiary, The Citizens National Bank of Norwalk (together referred to as "the Company"). All significant intercompany balances and transactions have been eliminated in consolidation. NATURE OF OPERATIONS: The Company grants commercial, real estate, installment and personal loans to customers primarily in Northern Ohio. Substantially all loans are secured by specific items of collateral including business assets, consumer assets and real estate. Commercial loans make up approximately 52% of the loan portfolio and include loans secured by business assets and commercial real estate. Commercial loans are expected to be repaid from cash flow from operations of businesses. Real estate loans make up approximately 17% of the loan portfolio and are secured by residential real estate. Management considers the Company to operate in one segment, banking. USE OF ESTIMATES: To prepare financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and future results could differ. The allowance for loan losses, fair values of financial instruments, and status of contingencies are particularly subject to change. SECURITIES: Securities are classified as held to maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Securities are classified as available for sale when they might be sold before maturity. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported separately in shareholders' equity, net of tax. Other securities such as Federal Home Loan Bank and Federal Reserve stock are carried at cost. Realized gains and losses resulting from the sale of securities are computed by the specific identification method. Interest and dividend income, adjusted by amortization of purchase premium or discount, is included in earnings. Securities are written down to fair value when a decline in fair value is not temporary. LOANS: Loans are reported at the principal balance outstanding, net of unearned interest, deferred loan fees and costs, the allowance for loan losses and charge-offs. Interest income is reported on the interest method and includes amortization of net deferred loan fees and costs over the loan term. Interest income may not be reported when full loan repayment is in doubt, typically when payments are past due over 90 days. Payments received on such loans are reported as principal reductions. - -------------------------------------------------------------------------------- (Continued) 6. INDEPENDENT COMMUNITY BANC CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2001 and 2000 - -------------------------------------------------------------------------------- NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) ALLOWANCE FOR LOAN LOSSES: The allowance for loan losses is a valuation allowance for probable incurred credit losses, increased by the provision for loan losses and decreased by charge-offs less recoveries. Management estimates the allowance balance required based on past loan loss experience, known and probable risks in the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management's judgment, should be charged off. A loan is impaired when full payment under the loan terms is not expected. Impairment is evaluated in total for smaller-balance loans of similar nature such as residential mortgage, consumer, and credit card loans, and on an individual loan basis for other loans. If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan's existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Loans are evaluated for impairment when payments are delayed, typically 90 days or more, or when it is probable that not all principal and interest amounts will be collected according to the original terms of the loan. PREMISES AND EQUIPMENT: Premises and equipment are stated at cost less accumulated depreciation. Depreciation expense is computed on the straight-line method over asset useful lives. Maintenance and repairs are charged to expense and improvements are capitalized. OTHER REAL ESTATE OWNED: Real estate properties, other than Company premises, acquired in collection of a loan are recorded at fair value at acquisition. Any reduction to fair value from the carrying value of the related loan at the time of acquisition is accounted for as a loan loss. After acquisition, a valuation allowance reduces the reported amount to the lower of the initial amount or fair value less costs to sell. Expenses, gains and losses on disposition, and changes in the valuation allowance are reported in other expenses. INCOME TAXES: Income tax expense is the sum of the current-year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. SERVICING RIGHTS: Servicing rights represent the allocated value of servicing rights retained on loans sold. Servicing rights are expensed in proportion to, and over the period of, estimated net servicing revenues. Impairment is evaluated based on the fair value of the rights, using groupings of the underlying loans as to interest rates and then, secondarily, as to geographic and prepayment characteristics. Any impairment of a grouping is reported as a valuation allowance. - -------------------------------------------------------------------------------- (Continued) 7. INDEPENDENT COMMUNITY BANC CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2001 and 2000 - -------------------------------------------------------------------------------- NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) INTANGIBLE ASSETS: At December 31, 2001, the Company has $3,412,350 of intangible assets related to a branch banking facility purchased in 1998. Goodwill and core deposit intangible assets acquired are amortized using the straight-line method over 15 years. LONG-TERM ASSETS: These assets are reviewed for impairment when events indicate the carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at discounted amounts. COMPREHENSIVE INCOME: Comprehensive income consists of net income and other comprehensive income (loss). Other comprehensive income (loss) includes the net change in net unrealized gains and losses on securities available for sale, net of tax, which are also recognized as separate components of equity. STOCK OPTION PLAN: The Company sponsors a stock option plan for executive officers. Expense for employee compensation under the stock option plan is based on Accounting Principles Board ("APB") Opinion 25 with expense reported only if options are granted below market price at grant date. Proforma disclosures of net income and earnings per common share are provided as if the fair value method of Statement of Financial Accounting Standards ("SFAS") No. 123 was used to measure expense for stock-based compensation. For further discussion see Note 11. FAIR VALUES OF FINANCIAL INSTRUMENTS: Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates. CASH FLOW REPORTING: Cash and cash equivalents include cash on hand, demand deposits with other financial institutions and federal funds sold. The Company reports net cash flows for customer loan and deposit transactions, interest-bearing time deposits with other financial institutions and short-term borrowings with maturities of 90 days or less. For the years ended December 31, 2001 and 2000, the Company paid interest of $4,929,613 and $4,914,748 and income taxes of $404,000 and $685,000. DIVIDEND RESTRICTION: Banking regulations, which require the maintenance of certain capital levels, may limit the amount of dividends that may be paid. For regulatory capital requirements, see Note 14. - -------------------------------------------------------------------------------- (Continued) 8. INDEPENDENT COMMUNITY BANC CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2001 and 2000 - -------------------------------------------------------------------------------- NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) LOSS CONTINGENCIES: Loss contingencies, including claims and legal action arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there now are such matters that will have a material effect on the financial statements. EARNINGS PER COMMON SHARE: Basic earnings per common share is net income divided by the weighted average number of shares outstanding during the period. Diluted earnings per share include the dilutive effect of additional potential common shares issuable under stock options. The weighted average number of common shares outstanding for basic and diluted earnings per share was as follows:
2001 2000 ---- ---- Weighted average shares outstanding - basic 613,284 607,158 Effect of stock options 740 - ------------ ------------ Weighted average shares outstanding - diluted 614,024 607,158 ============ ============
At December 31, 2000, there were 17,000 outstanding options not included in the weighted average shares outstanding for diluted earnings per share because the effect of the options was not dilutive. NEW ACCOUNTING PRONOUNCEMENT: Beginning January 1, 2001, a new accounting standard required all derivatives to be recorded at fair value. Unless designated as hedges, changes in these fair values are recorded in the income statement. Fair value changes involving hedges are generally recorded by offsetting gains and losses on the hedge and on the hedged item, even if the fair value of the hedged item is not otherwise recorded. Adoption of this standard on January 1, 2001 did not have a material effect because the Company did not hold any derivatives at December 31, 2000 or during 2001. A new accounting standard requires all business combinations to be recorded using the purchase method of accounting for any transaction initiated after June 30, 2001. Under the purchase method, all identifiable tangible and intangible assets and liabilities of the acquired company must be recorded at fair value at date of acquisition, and the excess of cost over fair value of net assets acquired is recorded as goodwill. Identifiable intangible assets must be separated from goodwill. Identifiable intangible assets with finite useful lives will be amortized under the new standard, whereas goodwill, both amounts previously recorded and future amounts purchased, will cease being amortized starting in 2002. Annual impairment testing will be required for goodwill with impairment being recorded if the carrying amount of goodwill exceeds its implied fair value. Adoption of this standard on January 1, 2002 will not have a material effect on the Company's financial statements. - -------------------------------------------------------------------------------- (Continued) 9. INDEPENDENT COMMUNITY BANC CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2001 and 2000 - -------------------------------------------------------------------------------- NOTE 2 - SECURITIES The amortized cost and fair value of securities available for sale as of December 31 are as follows:
Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value ------------ ------------ ------------ ------------ 2001 U.S. Treasury and U.S. Government agencies $ 12,003,005 $ 55,679 $ (5,772) $ 12,052,912 Obligations of states and political subdivisions 4,100,093 41,138 (8,312) 4,132,919 Mortgage-backed securities 3,175,265 7,183 (9,688) 3,172,760 Equity securities 107,158 26,789 -- 133,947 ------------ ------------ ------------ ------------ $ 19,385,521 $ 130,789 $ (23,772) $ 19,492,538 ============ ============ ============ ============ 2000 U.S. Treasury and U.S. Government agencies $ 12,005,315 $ 10,923 $ (136,446) $ 11,879,792 Obligations of states and political subdivisions 6,407,674 3,283 (85,124) 6,325,833 Mortgage-backed securities 1,379,674 -- (46,844) 1,332,830 ------------ ------------ ------------ ------------ $ 19,792,663 $ 14,206 $ (268,414) $ 19,538,455 ============ ============ ============ ============
The amortized cost and fair value of securities available for sale at December 31, 2001, by contractual maturity, are shown below. Equity securities and securities not due at a single maturity date, primarily mortgage-backed securities, are shown separately.
Amortized Fair Cost Value -------- ----- Due in one year or less $ 10,433,977 $ 10,431,954 Due after one year through five years 3,243,396 3,312,516 Due after five years through ten years 2,255,150 2,277,428 Due after ten years 170,575 163,933 Mortgage-backed securities 3,175,265 3,172,760 Equity securities 107,158 133,947 --------------- ---------------- $ 19,385,521 $ 19,492,538 =============== ================
- -------------------------------------------------------------------------------- (Continued) 10. INDEPENDENT COMMUNITY BANC CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2001 and 2000 - -------------------------------------------------------------------------------- NOTE 2 - SECURITIES (Continued) Proceeds from sales and calls of securities available for sale during 2001 were $10,444,268. Gross gains of $21,754 and gross losses of $8,309 were realized on those sales. Proceeds from sales and calls of securities available for sale during 2000 were $4,271,958. Gross gains of $18,643 and gross losses of $41,679 were realized on those sales. Securities with an amortized cost of approximately $ 8,185,000 and $12,042,000 at December 31, 2001 and 2000 were pledged to secure public deposits and securities sold under agreements to repurchase. NOTE 3 - LOANS Year-end loans are as follows:
2001 2000 ---- ---- Business loans $ 58,977,311 $ 54,426,758 Real estate loans 17,236,857 19,317,151 Consumer loans 25,499,868 31,784,930 ------------ ------------ Total loans $101,714,036 $105,528,839 ============ ============
In the normal course of business, the Company has made loans to certain directors, executive officers and their associates under terms consistent with the Company's general lending policies. Loan activity related to these individuals for 2001 is as follows: Aggregate balance - January 1, 2001 $ 178,305 New loans 1,842,861 Repayments (145,590) Other changes 656,121 ----------- Aggregate balance - December 31, 2001 $ 2,531,697 ===========
Other changes relate to new individuals becoming a director or executive officer. - -------------------------------------------------------------------------------- (Continued) 11. INDEPENDENT COMMUNITY BANC CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2001 and 2000 - -------------------------------------------------------------------------------- NOTE 4 - ALLOWANCE FOR LOAN LOSSES Activity in the allowance for loan losses is as follows:
2001 2000 ---- ---- Balance - January 1 $ 1,240,777 $ 1,147,158 Provision for loan losses charged to expense 431,500 373,000 Loans charged-off (469,994) (372,367) Recoveries 188,550 92,986 ----------- ----------- Balance - December 31 $ 1,390,833 $ 1,240,777 =========== ===========
Impaired loans are as follows:
2001 2000 ----------- ----------- Year-end loans with allowance for loan losses allocated $ 372,682 $ 219,361 Amount of the allowance allocated 86,117 54,840 Average of impaired loans during the year 293,711 794,668 Loans past due 90 days and still accruing 142,369 26,789 Non-accrual loans 424,746 647,062
At year-ends 2001 and 2000, all impaired loans had allowance for loan losses allocated. Interest income related to impaired loans recognized during the years ended December 31, 2001 and 2000 was not material. NOTE 5 - PREMISES AND EQUIPMENT Year-end premises and equipment are as follows:
2001 2000 ---- ---- Land $ 670,442 $ 670,442 Buildings and improvements 953,700 947,692 Furniture and equipment 1,182,033 1,159,392 Construction in progress -- 23,058 ----------- ----------- Total cost 2,806,175 2,800,584 Accumulated depreciation and amortization (1,180,778) (1,066,486) ----------- ----------- $ 1,625,397 $ 1,734,098 =========== ===========
- -------------------------------------------------------------------------------- (Continued) 12. INDEPENDENT COMMUNITY BANC CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2001 and 2000 - -------------------------------------------------------------------------------- NOTE 6 - DEPOSITS Time deposits of $100,000 or more were $17,073,440 and $19,373,812 at year-end 2001 and 2000. At year-end 2001, maturities of interest-bearing time deposits were as follows: 2002 $ 43,983,890 2003 12,754,357 2004 3,096,877 2005 1,456,341 2006 214,746 -------------- $ 61,506,211 ============== NOTE 7 - OTHER BORROWINGS On July 26, 2000, the Company borrowed $2,735,000 from another financial institution. At the discretion of the Company, the interest rate is based on either the current London Interbank Offering Rate (LIBOR) or Prime Rate. If the LIBOR is elected the rate will adjust every 90 or 180 days, and if Prime Rate is elected the rate will adjust daily. The rate at December 31, 2001 was 4.25% per annum, and based on Prime Rate. On December 1, 2000, the Company started making 27 quarterly principle and interest payments with a final balloon payment due at the end of the loan term. The Company pledged 15,000 shares of common stock of the Citizens National Bank of Norwalk as collateral for the borrowing. Upon the consummation of the anticipated change in control during April 2002, as discussed in Note 16, the entire outstanding balance of this borrowing will be due immediately. At December 31, 2001, required annual principle payments were as follows: 2002 $ 200,000 2003 200,000 2004 200,000 2005 200,000 2006 200,000 Thereafter 1,235,000 ------------ $ 2,235,000 ============ Additionally, a $14 million cash management advance revolving line of credit was approved with the Federal Home Loan Bank. At December 31, 2001, no advances were outstanding on the line. At December 31, 2000, $6,000,000 was outstanding on the line. Collateral for the line and letter of credit consists of a blanket pledge of all first-mortgage loans secured by one- to four-family residential properties and all Federal Home Loan Bank stock. - -------------------------------------------------------------------------------- (Continued) 13. INDEPENDENT COMMUNITY BANC CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2001 and 2000 - -------------------------------------------------------------------------------- NOTE 8 - COMMITMENTS, CONTINGENCIES, CONCENTRATIONS, AND FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK Some financial instruments are used in the normal course of business to meet the financing needs of customers and to reduce exposure to interest rate changes. These financial instruments include commitments to extend credit and standby letters of credit. These involve, to varying degrees, credit and interest-rate risk more than the amount reported in the consolidated financial statements. The Company has the following commitments outstanding (at market rate) as of December 31:
2001 2000 ---- ---- Unused commitments $ 16,848,000 $ 15,796,000
Exposure to credit loss if the other party does not perform is represented by the contractual amount of these items. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the commitment and generally have fixed expiration dates. Collateral or other security is normally not obtained for these financial instruments before their use, and many of the commitments are expected to expire without being used. Standby letters of credit are conditional commitments to guarantee a customer's performance to a third party. The Company is required by the Federal Reserve to maintain reserves consisting of cash on hand and noninterest-bearing balances on deposit with the Federal Reserve Bank. The required reserve balance at December 31, 2001 and 2000 was $733,000 and $686,000. At December 31, 2001 and 2000, the Company had holdings of $2,440,000 and $1,454,000 in demand deposits and federal funds sold due from Bank One, N.A. NOTE 9 - EMPLOYEE BENEFITS The Bank has established a 401(k) plan covering substantially all employees. The annual expense of the plan is based on 100% matching voluntary employee contributions for the first 4% of individual compensation deferred and 50% matching on the next 2% of voluntary employee compensation deferred. Employee voluntary and employer matching contributions are vested at all times. In addition, the employer may elect to make discretionary "Basic" and "Integrated" contributions, which are fully vested after 5 years of service. The expense related to this plan was $59,613 and $60,360 for 2001 and 2000. - -------------------------------------------------------------------------------- (Continued) 14. INDEPENDENT COMMUNITY BANC CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2001 and 2000 - -------------------------------------------------------------------------------- NOTE 10 - INCOME TAXES The provision for income taxes is as follows:
2001 2000 ---- ---- Federal Current $ 436,669 $ 525,653 Deferred 236 (2,314) --------- --------- $ 436,905 $ 523,339 ========= =========
The sources of gross deferred tax assets and liabilities are as follows:
DECEMBER 31, ------------------------- 2001 2000 --------- --------- Total deferred tax assets Allowance for loan losses $ 472,883 $ 421,864 Deferred compensation 128,265 121,379 Net unrealized loss on securities available for sale -- 86,431 Other 3,732 3,849 Total deferred tax liabilities FHLB stock dividends (63,376) (51,170) Depreciation (24,782) (17,931) Deferred loan fees/cost (4,293) (7,362) Net unrealized gain on securities available for sale (36,386) -- Stock received in conversion transaction (36,434) -- Other (8,899) (3,297) --------- --------- Net deferred tax asset $ 430,710 $ 553,763 ========= =========
The Company has sufficient taxes paid in current and prior years to warrant recording the full deferred tax asset without a valuation allowance. - -------------------------------------------------------------------------------- (Continued) 15. INDEPENDENT COMMUNITY BANC CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2001 and 2000 - -------------------------------------------------------------------------------- NOTE 10 - INCOME TAXES (Continued) Total provision for federal income tax differs from the expected amounts computed by applying the statutory federal tax rate of 34% to income before taxes. The reasons for this difference are as follows:
Years Ended December 31, ----------------------------------------------------- 2001 2000 ----------------------- ----------------------- Amount Rate Amount Rate ------------ ------- ------------ ------ Tax provision at statutory rate $ 490,326 34.0% $ 584,447 34.0% Tax-exempt interest income (44,993) (3.1) (65,135) (3.8) Other (8,428) (0.6) 4,027 0.2 ------------ ------- ------------ ------ Tax provision at effective rate $ 436,905 30.3% $ 523,339 30.4% ============ ======= ============ ======
NOTE 11 - STOCK OPTIONS In 1997, the shareholders approved an incentive stock option plan for the Company's executive officers, which provides for issue of up to 25,000 options. In 2000, shareholders increased the amount of options available for grants to 50,000 options. Exercise price is the market price at the date of grant. The maximum option term is ten years, and options generally vest over five years or upon the death or disability of a participant. Option vesting is accelerated in the event shareholders approve a change in control. A summary of the activity in the plan is as follows:
2 0 0 1 2 0 0 0 ------- ------- Weighted Weighted Average Average Exercise Exercise Shares Price Shares Price ------ ----- ------ ----- Outstanding at beginning of year 17,000 $ 19.82 17,800 $ 17.00 Granted -- -- 13,500 20.78 Exercised -- -- (7,000) 17.00 Forfeited -- -- (7,300) 17.41 -------------- ------------- Outstanding at end of year 17,000 19.82 17,000 19.82 ============== ============= Options exercisable at End of year 6,100 $ 18.57 2,700 $ 17.00
- -------------------------------------------------------------------------------- (Continued) 16. INDEPENDENT COMMUNITY BANC CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2001 and 2000 - -------------------------------------------------------------------------------- NOTE 11 - STOCK OPTIONS (Continued) Options outstanding at year-end 2001 were as follows.
Outstanding ------------------------------- Weighted Average Remaining Exercise Contractual Price Number Life (Years) Exercisable ----- ------ ------------ ----------- $ 17.00 4,500 6.2 3,600 20.00 5,500 8.6 1,100 21.50 7,000 8.1 1,400
Had compensation cost for stock options been measured using FASB Statement No. 123, net income and earnings per share would have been the pro forma amounts indicated below. The pro forma effect may increase in the future if more options are granted.
2001 2000 ---- ---- Net income as reported $ 1,005,230 $ 1,195,623 Pro forma net income 993,313 1,190,665 Basic earnings per common share as reported 1.64 1.97 Proforma basic earnings per common share 1.62 1.96 Diluted earnings per common share as reported 1.64 1.97 Proforma diluted earnings per common share 1.62 1.96
The pro forma effects of options granted in 2000 are computed using option-pricing models, using the following weighted-average assumptions as of the grant date.
2000 ---- Risk-free interest rate 6.41% Expected option life 10 years Dividend yield 3.74% Expected stock price volatility -- Weighted average fair value of options Granted during year $3.34
- -------------------------------------------------------------------------------- (Continued) 17. INDEPENDENT COMMUNITY BANC CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2001 and 2000 - -------------------------------------------------------------------------------- NOTE 12 - FAIR VALUES OF FINANCIAL INSTRUMENTS The following table shows the estimated fair values and the related carrying values of the Company's financial instruments at December 31, 2001 and 2000. Items that are not financial instruments are not included.
2001 2000 ---- ---- Carrying Estimated Carrying Estimated Amount Fair Value Amount Fair Value --------------- ------------- -------------- --------------- Financial assets: Cash and cash equivalents $ 7,380,986 $ 7,381,000 $ 4,884,947 $ 4,885,000 Securities available for sale 19,492,538 19,493,000 19,538,455 19,539,000 Other securities 736,200 736,000 700,300 700,000 Loans, net 100,323,203 101,805,211 104,288,062 103,343,000 Accrued interest receivable 669,213 669,000 936,684 937,000 Financial liabilities: Demand and savings deposits (58,642,217) (58,642,000) (52,605,424) (52,605,000) Time deposits (61,506,211) (62,264,000) (63,176,869) (63,296,000) Securities sold under agreements to repurchase (312,693) (313,000) (300,871) (301,000) Federal Home Loan Bank borrowings -- -- (6,000,000) (6,000,000) Other borrowings (2,235,000) (2,235,000) (2,635,000) (2,635,000) Accrued interest payable (451,649) (452,000) (477,464) (477,000)
For purposes of the above disclosures of estimated fair values, the following assumptions were used. The estimated fair value approximates carrying amount for all items except those described below. The estimated fair value for securities available for sale is based on quoted market values for the individual securities or for equivalent securities. The estimated fair value for loans is based on estimates of the difference in interest rates the Company would charge the borrowers for similar such loans with similar maturities, applied for an estimated time period until the loan is assumed to reprice or be paid. The estimated fair value for time deposits is based on estimates of the rate the Company would pay on such deposits, applied for the time period until maturity. The estimated fair value for other financial instruments and off-balance-sheet loan commitments approximate cost and is not considered significant to this presentation. While these estimates of fair value are based on management's judgment of the most appropriate factors, there is no assurance that were the Company to have disposed of such items, the estimated fair values would necessarily have been achieved at those dates, since market values may differ depending on various circumstances. The estimated fair values at December 31, 2001 and 2000 should not necessarily be considered to apply at subsequent dates. - -------------------------------------------------------------------------------- (Continued) 18. INDEPENDENT COMMUNITY BANC CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2001 and 2000 - -------------------------------------------------------------------------------- NOTE 12 - FAIR VALUES OF FINANCIAL INSTRUMENTS (Continued) In addition, other assets and liabilities of the Company that are not defined as financial instruments are not included in the above disclosures, such as property and equipment and intangibles. In addition, nonfinancial instruments typically not recognized in the financial statements nevertheless may have value but are not included in the above disclosures. These include, among other items, the estimated earnings power of core deposit accounts, the earnings potential of loan servicing rights, the earnings potential of the Company's trust department, the trained work force, customer goodwill and similar items. NOTE 13 - OTHER COMPREHENSIVE INCOME Other comprehensive income components and related taxes were as follows:
2001 2000 ---- ---- Unrealized holding gain on securities available for sale $ 374,670 $ 886,252 Reclassification adjustments for losses (gains) included in net income (13,445) 23,036 -------------- -------------- Net unrealized gain 361,225 909,288 Tax effects (122,817) (309,158) -------------- -------------- Total other comprehensive income $ 238,408 $ 600,130 ============== ==============
NOTE 14 - REGULATORY MATTERS The Bank is subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and prompt corrective-action regulations involve quantitative and qualitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. The prompt corrective action regulations provide five classifications, including well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If only adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and plans for capital restoration are required. - -------------------------------------------------------------------------------- (Continued) 19. INDEPENDENT COMMUNITY BANC CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2001 and 2000 - -------------------------------------------------------------------------------- NOTE 14 - REGULATORY MATTERS (Continued) At year-end 2001 and 2000, actual capital levels (in thousands) and minimum required levels of the Bank were:
Minimum Required To Be Well Minimum Required Capitalized Under For Capital Prompt Corrective Actual Adequacy Purposes Action Regulations ------ ----------------- ------------------ Amount Ratio Amount Ratio Amount Ratio ------ ----- ------ ----- ------ ----- DECEMBER 31, 2001 - ----------------- Total capital (to risk weighted assets) $ 12,037 12.24% $ 7,868 8.0% $ 9,835 10.0% Tier 1 capital (to risk weighted assets) 10,646 10.82 3,934 4.0 5,901 6.0 Tier 1 capital (to average assets) 10,646 7.79 5,465 4.0 6,831 5.0 DECEMBER 31, 2000 - ----------------- Total capital (to risk weighted assets) $ 11,329 10.96% $ 8,271 8.0% $ 10,339 10.0% Tier 1 capital (to risk weighted assets) 10,088 9.76 4,135 4.0 6,203 6.0 Tier 1 capital (to average assets) 10,088 7.84 5,147 4.0 6,433 5.0
At year-end 2001 and 2000, the Bank was categorized as well capitalized. Management believes that no events have occurred since December 31, 2001 that would change the capital category. NOTE 15 - PARENT COMPANY CONDENSED FINANCIAL STATEMENTS CONDENSED BALANCE SHEETS December 31, 2001 and 2000
2001 2000 ----------- ----------- ASSETS Cash $ 69,189 $ 24,992 Investment in subsidiary bank 14,128,570 13,623,492 ----------- ----------- Total assets $14,197,759 $13,648,484 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Borrowings $ 2,235,000 $ 2,635,000 Other liabilities 63,761 20,610 ----------- ----------- Total liabilities 2,298,761 2,655,610 Total shareholders' equity 11,898,998 10,992,874 ----------- ----------- Total liabilities and shareholders' equity $14,197,759 $13,648,484 =========== ===========
- -------------------------------------------------------------------------------- (Continued) 20. INDEPENDENT COMMUNITY BANC CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2001 and 2000 - -------------------------------------------------------------------------------- NOTE 15 - PARENT COMPANY CONDENSED FINANCIAL STATEMENTS (Continued) CONDENSED STATEMENTS OF INCOME Years ended December 31, 2001 and 2000
2001 2000 ---- ---- Dividends from subsidiary bank $ 1,069,700 $ 621,500 Other income 659 1,323 -------------- -------------- 1,070,359 622,823 Interest expense 163,474 254,264 Operating expenses 5,805 7,101 Merger expenses 333,815 - -------------- -------------- INCOME BEFORE INCOME TAX BENEFIT AND EQUITY IN UNDISTRIBUTED NET INCOME OF SUBSIDIARY BANK 567,265 361,458 Income tax benefit 171,295 88,561 -------------- -------------- INCOME BEFORE EQUITY IN UNDISTRIBUTED NET INCOME OF SUBSIDIARY BANK 738,560 450,019 Equity in undistributed income of subsidiary bank 266,670 745,604 -------------- -------------- NET INCOME $ 1,005,230 $ 1,195,623 ============== ==============
CONDENSED STATEMENTS OF CASH FLOWS Years ended December 31, 2001 and 2000
2001 2000 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 1,005,230 $ 1,195,623 Adjustments to reconcile net income to net cash from operating activities Change in other assets and liabilities 43,151 93,411 Equity in undistributed net income of bank subsidiary (266,670) (745,604) -------------- -------------- Net cash from operating activities 781,711 543,430 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings -- 2,735,000 Repayments of borrowings (400,000) (3,100,000) Cash dividends paid to shareholders (368,089) (365,143) Proceeds from sale of treasury stock 33,337 208,708 Acquisition of treasury stock (2,762) (37) -------------- -------------- Net cash from financing activities (737,514) (521,472) -------------- -------------- Net change in cash and cash equivalents 44,197 21,958 Cash and cash equivalents at beginning of year 24,992 3,034 -------------- -------------- Cash and cash equivalents at end of year $ 69,189 $ 24,992 ============== ==============
- -------------------------------------------------------------------------------- (Continued) 21. INDEPENDENT COMMUNITY BANC CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2001 and 2000 - -------------------------------------------------------------------------------- NOTE 16 - ACQUISITION On November 2, 2001, the Company announced that it had entered into an Agreement and Plan of Merger with First Citizens Banc Corp., Sandusky, Ohio, (First Citizens). Under terms of the Agreement, the Company would merge with and into First Citizens. In return, shareholders of the Company would receive 1.7 shares of First Citizens common stock for each share of the Company's common stock that they hold. The agreement is subject to approval by regulatory authorities as well as the shareholders of both First Citizens and the Company. The merger is anticipated to close in April 2002. - -------------------------------------------------------------------------------- (Continued) 22. First Citizens Banc Corp (FCBC) Independent Community Banc Corporation (ICBC) Pro Forma Condensed Combined Consolidated Balance Sheet (Unaudited) At December 31, 2001 (In thousands except per share data)
Pro Forma Historical Historical Adjustments Footnote Pro Forma Debit/ FCBC ICBC (Credit) Reference Combined ---- ---- ---------------- --------- -------- ASSETS Cash and due from banks $19,227 $4,981 $ - $ 24,208 Federal funds sold 6,025 2,400 - 8,425 Interest-bearing deposits - 990 - 990 Securities available for sale 113,587 19,493 (125) (7) 132,955 Securities held to maturity 139 736 - 875 Loans held for sale 2,307 - - 2,307 Loans, net 331,347 100,323 360 (1) 432,030 Premises and equipment 7,003 1,626 (126) (2) 8,503 Goodwill 672 - 14,947 (3) (7) 15,619 Other identified intangible assets 871 3,412 (1,171) (4) 3,112 Accrued interest and other assets 6,493 1,667 65 (9) 8,225 -------- -------- --------- -------- TOTAL ASSETS $487,671 $135,628 $13,950 $637,249 ======== ======== ========= ======== LIABILITIES Deposits $410,178 $120,148 $ (982) (5) $531,308 Securities sold under repurchase agreements 10,311 313 - 10,624 Other borrowings 15,531 2,235 - 17,766 Accrued expenses and other liabilities 2,924 1,033 (735) (6) 4,692 -------- -------- --------- -------- TOTAL LIABILITIES 438,944 123,729 (1,717) 564,390 SHAREHOLDERS' EQUITY Common stock 23,258 1,870 (22,262) (8) 47,390 Paid-in capital - 1,543 1,543 (8) - Retained earnings 28,844 8,698 8,698 (8) 28,844 Treasury stock (4,919) (283) (283) (8) (4,919) Accumulated other comprehensive income 1,544 71 71 (8) 1,544 -------- -------- --------- -------- TOTAL SHAREHOLDERS' EQUITY 48,727 11,899 (12,233) 72,859 -------- -------- --------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $487,671 $135,628 $ (13,950) $637,249 ======== ======== ========= ========
First Citizens Banc Corp (FCBC) Independent Community Banc Corporation (ICBC) Pro Forma Condensed Combined Consolidated Income Statement (Unaudited) For the Year Ending December 31, 2001 (In thousands except per share data)
Pro Forma Historical Historical Adjustments Footnote Pro Forma FCBC ICBC Debit/(Credit) Reference Combined ---------- ---------- -------------- --------- --------- Interest income $ 35,348 $ 9,921 $ 130 (1) $45,139 Interest expense 15,453 4,904 (693) (5) 19,664 -------- ------- --------- ------- Net interest income 19,895 5,017 (563) 25,475 Provision for loan losses 1,803 431 - 2,234 -------- ------- --------- ------- Net interest income after provision for loan losses 18,092 4,586 (563) 23,241 Noninterest income 6,117 1,070 - 7,187 Noninterest expense 16,933 4,214 377 (2)(4)(9) 21,524 -------- ------- --------- ------- Income before income taxes 7,276 1,442 (187) 8,905 Provision for income taxes 1,983 437 63 (10) 2,483 -------- ------- --------- ------- Net Income $ 5,293 $1,005 $(123) $ 6,421 ======= ====== ===== ======= Earnings Per Share: Basic $ 1.30 $1.64 ======= ====== Diluted $ 1.30 $1.64 ======= ====== Pro Forma Earnings Per Share Basic (11) $ 1.25 ======= Diluted (11) $ 1.25 =======
Notes: (1) Represents the estimated fair value adjustment related to the loan portfolio and is assumed to amortize into interest income on a level yield method over the estimated period to maturity or repricing of the portfolio. (2) Represents the estimated fair market value adjustment related to land of ($155) and the office buildings of $29. Office buildings are assumed to amortize on a straight-line basis over the estimated life of 40 years. (3) Represents the estimate of the excess of the total direct acquisition costs over the estimated fair value of the net assets acquired. (4) Represents the elimination of the historical core deposit intangible and goodwill of ICBC in the amount of $3,412 and the establishment of the estimated core deposit intangible related to the acquisition in the amount of $2,241, which is assumed to amortize into noninterest expense on an accelerated basis over 10 years. (5) Represents the estimated fair value adjustment related to deposits and is assumed to amortize into interest expense on a level yield basis over the estimated maturity of the deposits. (6) Represents the accrual of certain estimated acquisition costs of $1,343 and stock issuance costs of $323, the related tax effect of $352 and deferred taxes related to the purchase accounting adjustments of $579. (7) Represents an adjustment to reflect the cost of ICBC shares previously acquired by FCBC as a component of the total transaction cost. (8) Represents the elimination of ICBC equity on a historical basis and the issuance of an estimated 1,063,234 shares of FCBC based on an exchange multiple of 1.7, less stock issuance costs of $323. (9) Represents estimated value of non-compete agreements of $214 which will be amortized over their life of 24 months and the elimination of merger costs paid prior to December 31, 2001 by FCBC of $149. (10) Represents the income tax effect of the estimated purchase accounting adjustments using an effective rate of 34%. (11) Basic and diluted earnings per share for the year ended December 31, 2001 have been computed based on 5,146,363 weighted average shares outstanding. -----END PRIVACY-ENHANCED MESSAGE-----